As American thoroughbred racing takes center stage under the famed Twin Spires of Churchill Downs this weekend, several horses in the spotlight will be bankrolled by a new and surprising source: China.

In just five years, the exclusive and secretive China Horse Club has become a major global player in the so-called sport of kings. The club co-owns 10 prominent horses racing Friday and Saturday, including the Kentucky Derby favorite Justify; another Derby contender, Audible; the Oaks entrant Sassy Sienna; and last year’s Oaks winner, Abel Tasman.

The emergence of the China Horse Club reflects the rise of partnerships across the industry to reduce risk by pooling capital and buying into proven horses. Nine of the 20 Derby horses are owned by partnerships, including eight of the top 10 horses in the point standings.

“The Derby in America means everything, so we’re excited at the moment just to have a shot,” said Michael Wallace, the club’s racing and bloodstock manager. “If we could win it, that news would be spread far and wide through China, and it would be a massive feather in the cap for the club.”

Gone are the days when bidding wars among the world’s racing elite produced big price tags at the sales, including a record $16 million in 2006 for The Green Monkey, who raced three times and finished no better than third.

The China Horse Club has about 200 members, according to its vice president, Eden Harrington. Membership costs a minimum of $1 million, according to some reports, but Mr. Harrington said the club offered different tiers of investment and that the fee was a credit that went toward the purchase of horses. He declined to give a range, and the club does not disclose the identities of members, who include wealthy citizens from China’s mainland and beyond.

The club’s success, however, has led to questions about where its money is coming from, how it is being used, and how the club has been able to spend so much overseas when the Chinese government’s sweeping anti-corruption crackdown has halted billions of dollars of international deals.

Teo Ah Khing, the man behind the high-flying club, is a self-described billionaire from Malaysia with big ambitions. Mr. Teo, a Harvard-educated architect, does not want to just win races, he wants to build a horse racing mecca in China, where gambling is still illegal. He has also broken ground on a horse racing “resort and lifestyle development” in St. Lucia, a Caribbean island that currently has no thoroughbred industry but does have a citizenship-by-investment program that provides passports to anyone who invests $100,000 in the country — an attractive perk for wealthy Chinese citizens who want to escape pollution and seek better education for their children.

Mr. Teo did not respond to multiple requests for comment.

Mr. Teo’s introduction to the world of horse racing began when he designed the Meydan Racecourse in Dubai for Sheikh Mohammed bin Rashid Al Maktoum. His club is now the world’s ninth-ranked owner, according to a calculation by the website Thoroughbred Racing Commentary.

Mr. Harrington said the club kept its membership private to shield members from potential public scrutiny amid a Chinese government led anti-corruption campaign which has “created a culture of fear where people didn’t want to be seen to be spending money in a way that may be seen as excessive.”

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A race at the Meydan Racecourse in Dubai, which Mr. Teo designed for Sheikh Mohammed bin Rashid Al Maktoum.CreditTom Dulat/Getty Images

The club, he said, “took a stance to ensure that we would race under the banner of the club to protect our members to that end.” He added that the club has undertaken its own reviews to make sure members did not come by money illegally.

Adding to the China Horse Club’s mystery, Mr. Teo runs it through a complicated network of companies that are registered in Hong Kong, China, Singapore and the Cayman Islands.

Corporate filings in China show Bai Zhisheng, a senior official in the city of Tianjin, as a director of two companies in partnership with Mr. Teo, including Desert Star Holdings, the entity that owns the China Horse Club. Mr. Bai has been a member of a regional committee charged with reforming state-owned companies since 2014. He did not respond to a request for comment.

The club has marketed itself as both an investment opportunity and a networking group. Investors might see another potential benefit: a way to invest money overseas at a time when strict currency controls make it otherwise difficult. Mr. Harrington said that concept has never been a part of the club’s business plan, that the club also invests in China itself, and investors participate because they are drawn to the sport. The club closely vets all applicants before it accepts them, Mr. Harrington said.

Shortly after the club was formed, Mr. Teo set up a joint venture to develop a property in Tianjin, less than two hours southeast of Beijing, billing it as Tianjin Equine Culture City. Little development occurred.

Mr. Teo then shifted his focus to the China Equine Cultural Festival, an annual “lifestyle, business and thoroughbred racing” event. It has been held for the past two years in Ordos, Inner Mongolia, a quiet and largely empty city in northern China, and includes four races and multiple ceremonies honoring advisers and local government officials spread across two days.

Around 17,000 people attended last year’s event, the club said, including John Warren, a member of the club’s international advisory council who is also the bloodstock and racing adviser to Queen Elizabeth; Allen Chastanet, the prime minister of St. Lucia; and Elliott Walden, the president and chief executive of WinStar Farm, with whom the club partnered, along with Head of Plains Partners and Starlight Racing, on Justify and Audible.

Building a horse racing empire in a market as large as China is alluring. The Chinese New Year Raceday in February in Hong Kong, where racing is regulated and wagering is legal, attracted 89,084 people searching for a lucky start. The all-sources handle, or money bet, was about $221 million. The attendance for last year’s Derby was 158,070, but the handle was $209 million.

However, significant hurdles remain, including the ban on wagering in China. Many wealthy businessmen have tried before Mr. Teo and failed. Tracks and veterinary facilities are inadequate, and there is a lack of quarantine facilities, which makes it difficult to get horses out of the country.

The club’s events are organized on a local level, without the recognition of major regional or international bodies governing the sport.

Mr. Teo’s project in St. Lucia, which is also a member of the British Commonwealth and home to about 200,000 people, includes plans for a casino, marina, mall, resort, free-trade zone and racetrack with room for 1,000 horses. In November 2016, Prince Harry, Mr. Chastanet and Mr. Teo broke ground. Then quarantine issues and legal problems over land acquisition delayed the nearly $3 billion project for more than a year.

Mr. Chastanet said he did not know any other members of the club except Mr. Teo. The country’s passport program was a big draw for Mr. Teo, as well as the fact that there was no established horse racing industry, “so he was not stepping on anyone’s toes,” he said.

Despite challenges on the development front, the club has made a splash in racing, with nearly 20 Group I or Grade I victories in Australia, England, France, Ireland, Singapore and the United States; and partners like Coolmore, WinStar and SF (Soros Fund) Bloodstock; and the international bloodstock advisers Mr. Flanagan and Mr. Wallace. About three years ago, it set its sights on the American market.

“We did a lot of research and watched from afar for a good 12 months before we came on board,” said Mr. Wallace.

The club secured its biggest victory in the United States to date last year at Churchill Downs, when Abel Tasman, co-owned by Clearsky Farms, came back from last place to win the Kentucky Oaks. The filly went on to win the Eclipse Award for 3-year-old Filly of the Year.

On Saturday, Justify and Audible’s jockeys will be wearing WinStar’s white-and-green silks, a matter of following a rotation, Mr. Walden said. Abel Tasman’s jockey was to be in the China Horse Club’s red-and-yellow silks on Friday, as was Sassy Sienna’s. The club bought into that filly just days ago.

Most of the club’s American partners say they do not know much about how the club is run or about its projects, but it has gained a reputation among owners and breeders for paying its bills on time in a business where that often does not happen.

“Mr. Teo is a first-class man that we’ve had a tremendous relationship with,” Mr. Walden said. “He’s extremely smart and energetic and a great owner for our business.”

That business now has even the biggest powers teaming up.

“Why buy one horse when you can buy five, why buy five when you can buy 10, why buy 10 when you buy 20?” said Sol Kumin, a hedge fund executive who runs Head of Plains Partners, a co-owner of Justify and Audible. He is also involved with several other successful partnerships, including Monomoy Stables, which owns Derby entrant My Boy Jack and the Oaks favorite Monomoy Girl.

Jack Wolf and his wife Laurie, who run the syndicate Starlight Racing, jumped at the opportunity to buy into Audible and Justify because they usually invest in unproven yearlings.

“In my mind, as risky as this business is, and how capital intensive it is, then the partnership makes a lot of sense,” Jack Wolf said.

About 20 members from the China Horse Club were said to be coming in for the Derby, in addition to partners from Head of Plains and Starlight. They may have different backgrounds, but they all know that in this business, nothing is a sure thing, not even space in the winner’s circle.

“If either one of these horses wins, let’s hope there’s even enough room,” Jack Wolf said outside Audible’s barn. Presumably that space will be sufficient for a proper after-party.